New home sales drop
The number of new homes sold fell slightly in November as the Reserve Bank’s cash rate hike bit down on home buyers.
According to the Housing Industry Association’s JELD-WEN New Home Sales Report, the number of new homes sold eased by 0.2 per cent in November 2010 with detached house sales declining by 1.1 per cent.
HIA chief economist Harley Dale said new home building conditions weakened considerably over the second half of 2010 and the November rate hikes rubbed further salt into the wound.
“New home building activity looks set to decline across all states and territories in 2011,” Mr Dale said.
“The risk of a sharp contraction in new home building in 2011 is exacerbated by the negative impact on households and small businesses of increases in borrowing costs and by the persistent lack of available credit for small and medium sized new home projects.”
Mr Dale said the federal government should re-introduce housing reform policies to address the supply side constraints.
“Given that new housing is one of the most heavily and inequitably taxed industries in Australia it is essential that the upcoming taxation summit delivers bold and effective policy reform,” he said.
Over the three months to November 2010 new home sales fell by 2 per cent to be 11 per cent lower when compared to the same three month period in 2009.